By 96, Mopar was suggesting 5w30 oil in most of their vehicles, with you running 10w40, that could be the reason for your higher then expected oil pressure. These new motors have tighter clearances then the old stuff had, and if it was well cared for, it could be in great condition, they wouldn't go 300,000 miles if they weren't well built to begin with.

It sounds to me like you got another junk new part, this time an oil pressure sending unit. It seems to be more the normal these days rather then the exception. Not that it would probably matter, but where did you get the new op sending unit from?

I also believe you need to be sure there is voltage to the oil pressure gauge, its possible the op and gas gauge side of the printed circuit board on the instrument cluster is defective, it wouldn't be the 1st one I've seen that was.

As far as the high op causing an issue with the gauge, I don't see how that could happen. The gauge is a simple electric meter. It measures the resistance between the power source and the ground. If the power source has the correct starting voltage, the most the gauge can read is no resistance, which would be max (or no) pressure reading. The power from the gauge grounds through the sending unit, which is a simple spring loaded resistor. The high pressure under the spring either eliminates (or nearly eliminates) the resistance to ground, or it creates the maximum (or near maximum) resistance to ground, depending on how the system is set up. Gene